• Smithfield Q1 losses up almost three-fold
  • Hit by impairment charges, weak hog performance
  • Revenues US$2.72bn vs $3.14bn

US meat group Smithfield Foods has today (8 September) reported an increase in first-quarter losses as the weak performance at its hog unit offset "record" earnings from packaged meats.

Revenues fell from US$3.14bn to $2.72bn in the three-month period, hit by lower consumer spending in the wake of the recession and concerns over swine flu.

Losses from continuing operations totalled $107.7m, up from $29.1m in the prior year. The result included a $34.1m impairment charge linked to its hog production farm assets and pre-tax debt extinguishment charges totalling $7.4m.

However, the company emphasised that its liquidity levels remain "in excess" of $1bn, with a new $1bn US credit facility and $625m bond issue strengthening its balance sheet.

According to Smithfield, deepening losses at its hog unit outweighed increased profitability at the company's packaged meats business.

In an effort to readdress supply and demand in the hog market, Smithfield cut its sow herd by an additional 3% in the period, bringing its total reduction to over 13% in the last six quarters.

Smithfield said that pork segment restructuring activities remain "on-time and on-budget" and that benefits have begun to take hold.

For the full results from Smithfield click here, or check back later for just-food's post-conference call insight.